Chicago soybean futures hold steady

CANBERRA: Chicago soybean futures held steady on Tuesday after big gains in the previous session as concerns over the US weather outlook and a reassessment of Donald Trump’s chances of winning power prompted short-covering by speculators.

The most-active soybean contract on the Chicago Board of Trade (CBOT) was flat at $10.69 a bushel by 0449 GMT after rising 3.2% on Monday, the biggest one-day increase since June last year.

Soybeans hit a four-year low of $10.32 last week amid ample supply and anticipation that Trump could renew his trade war with top soy importer China if he regains the presidency.

But US President Joe Biden’s decision on Sunday to step aside has changed the mood around the election, with Vice President Kamala Harris receiving a flood of endorsements and cash.

“It’s more fund short covering,” said Vitor Pistoia, an analyst at Rabobank in Sydney, adding that forecasts for hot, dry weather in the United States were playing a role.

“Rain in the US has stopped,” he said. “It’s a bit concerning. The market is reflecting fear that the crop might not be as big as expected.”

The US Department of Agriculture on Monday rated 68% of the soybean crop in good-to-excellent condition, unchanged from last week and the highest for this time of year since 2020.

In other crops, CBOT corn slipped 0.4% to $4.13-1/4 a bushel, having risen 2.5% in the previous session, while wheat fell 0.2% to $5.46-3/4 a bushel.

Corn, wheat and soybeans are near their lowest levels since 2020 amid plentiful supply. Speculators are betting heavily on lower prices, leaving the markets vulnerable to bouts of short-covering. The USDA said 67% of the US corn crop is in good-to-excellent condition, down one percentage point from a week ago, and that the winter wheat harvest advanced more slowly than expected.

Hot and dry weather was also forecast for parts of Canada and the Black Sea region, and poor conditions in France have hit crops there. Russian wheat export prices were unchanged last week, shipment volumes are still low and farmers are not in a hurry to sell at current low levels, analysts say.

European Union crop monitoring service MARS on Monday cut most of its forecasts for average grain yields in the EU this year, with the sharpest drop for maize (corn) and sunflower.